What do LGBT families need differently with their possessions
- LGBTQ+ couples deal with three financial planning problems that straight couples don’t have to think about.
- Gay financial planner Ryan Klippel says LGBTQ+ couples need to establish healthcare directives ASAP.
- He also recommends looking into estate planning and second parent adoption if you have children.
Heterosexual and transgender couples and parents often have to deal with financial headaches that their heterosexual counterparts don’t have to worry about.
Financial planner and head of social impact at Optas Capital, Ryan Klippel, says the approach to financial planning for LGBTQ+ families is different from the approach used for straight families. He tells Insider, “The legal structures in this country were not designed to take into account the different perceptions of how LGBTQ+ families exist today.” He adds, “I’m a member of the LGBTQ+ community too, so I have some looks in the game.”
Based on his expertise in LGBTQ+ financial planning, here are three issues that gay and transgender families need to navigate differently.
1. Health Care Directives
According to the National Institute on Aging, a health care guidance is a document that is drafted in the event of a medical crisis where you may be too ill to make your own health care decisions. Health Care Directive specifies the type of care you want to receive, how long you want to leave on life support, and whom you trust to make decisions for you.
Klippel explains, “Let’s say, for example, if you are an LGBTQ+ couple and you have a husband, girlfriend or domestic partner who would prefer making these decisions, but you are not legally married. You have to identify them in your healthcare directive so you can prioritize who you trust him to make those decisions.”
In the past, Klippel says, health care providers prioritized blood relatives, usually parents, over the family chosen or chosen by the trans person. Many members of the LGBTQ+ community face discrimination from their blood relatives, which is why it is important to create detailed healthcare guidance. “For many people, you probably don’t have a connection with your parents, or you don’t want them to make your decisions,” Klippel says.
2. Adoption of a second father
According to Lambda Legal, second father adoption is a legal procedure that gives the biological parent’s partner joint parenting rights over their child. For example, a same-sex couple in which a woman gives birth to their child may need adoption by a second parent to ensure that her partner is recognized as the legal parent of their child.
“It’s really important, again, that we talk about the legal structure and what the current legal system is like when it comes to second parent adoption,” says Klippel. “It varies depending on where you are in the country and on your local state rules.”
“This is something you can do with a financial planner along with an estate planning attorney to make sure these changes are implemented promptly,” Klippel says.
3. Estate Planning
Estate planning is a strategy to protect your family and your money if you die or become incapacitated. “When it comes to estate planning, in terms of who will acquire your property, same-sex couples have to spend more time focusing on your desires because the current system is not set up for LGBTQ+ families,” says Klippel.
He adds that usually the property of the husband and wife can be allotted directly, or the estate of one of them can be transferred to their next of kin. Klippel has heard stories of an LGBTQ+ person’s property going to their blood family because their desire to leave their property to a partner who was not legally married was not respected by their state’s legal systems.
Just like second parent adoption, Klippel recommends consulting with a financial planner and estate planning attorney to make sure your bases are covered.
If you can’t hire a real estate or financial planner, Klippel recommends doing your due diligence about local procedures in your state. Try searching on Google for “second parent adoption + Arizona” or “LGBTQ + Wyoming estate planning.”
He also recommends thinking about the following topics to facilitate the process:
- Beneficiaries of your 401(k) after your death, or if you become disabled
- Debt assignment transfer – This is the person you want to transfer your debt to after your death, or if you become incapacitated
- Who do you want to transfer your accounts to after your death, or if you become disabled
Finally, Klippel says, “Make sure you have a file with your most recent records that you can review periodically, ideally on an annual basis. We recommend reviewing these types of things at least every five years.”